First Quantum Minerals in Zambia, Unions agree on pay increases

First Quantum Minerals Ltd. agreed with a trio of unions on pay increases over three years for workers at its copper operations in Zambia.

Wages will rise in increments of 6 percent to 7 percent starting in January 2017 and education allowances will also be increased in stages, the company said in an e-mailed statement from London on Thursday.

Miners in Africa’s second-largest copper-producing country are struggling with higher production costs and lower metal prices, which are cutting into profits and have led companies to announce thousands of job cuts. Facing sluggish economic growth and soaring inflation, the government is under strain to ease public discontent before elections in August.

“Even though our profitability has been hit by falling copper prices and rising operational costs, the company understands the pressure that increasing costs of living place on its employees and their families,” FQM said in the statement.

FQM owns 80 percent of the Kansanshi mine, located about 180 kilometers (112 miles) northwest of the Copperbelt town of Chingola, which has the capacity to produce 340,000 tons of copper and 120,000 ounces of gold every year. Copper output at the mine declined 14 percent to 227,000 tons last year, which together with lower prices for the metal cut gross profit by 70 percent, the company said on Thursday.

Kansanshi, which has a workforce of 2,841, is the largest producer of copper on the continent, FQM said. ZCCM Investments Holdings, the company formed to hold Zambian state’s minority stakes in local copper mines, has the remaining ownership of Kansanshi, according to FQM’s website.